Total Revenues

Increased from $103.50M to $129.35M (≈25%)

Total Revenues rose by approximately 25% driven primarily by strong rental revenue growth and increased interest income, mirroring the trend observed in previous periods where acquisitions boosted rental revenue and loans receivable portfolios contributed to higher income. " "

Rental Revenue

Increased from $98.51M to $121.79M (≈24%)

Rental revenue grew nearly 24% as the company expanded its real estate portfolio—with additional properties acquired in recent periods—and recognized higher revenue from newer assets, echoing the growth seen in FY 2024 due to portfolio expansion and targeted acquisitions. " "

Net Income

Increased from $47.12M to $56.28M (≈19%)

Net income improved by about 19% as a result of increased rental income and higher interest income, partially offset by higher expenses observed in previous periods; this improvement reflects stronger profitability trends that have been developing over prior quarters. " "

Income from Operations

Increased from $62.38M to $79.62M (≈28%)

Income from Operations rose by roughly 28% thanks to a significant boost in overall revenues—including rental and interest income—despite incremental increases in expenses such as G&A and depreciation, consistent with the positive margins built up in earlier periods. " "

Operating Cash Flow

Increased from $66.75M to $77.16M (≈15.6%)

Operating cash flow increased by about 15.6% due to improved net income and favorable non-cash adjustments (like depreciation and impairment provisions), along with positive changes in working capital compared to Q1 2024, sustaining the cash generation trends observed in previous periods. " "

Interest Expense

Increased from $15.60M to $23.79M (≈52%)

Interest expense jumped by approximately 52% primarily because of a higher outstanding debt balance and increased rates, a trend consistent with earlier fiscal activity where financing costs had been rising due to portfolio expansion and additional borrowings. " "

Total Assets and Total Equity

Total Assets reached $6.06B; Total Equity reached $3.82B (≈7% QoQ improvement)

Balance sheet strength improved with assets growing as a result of ongoing real estate acquisitions and increased loans receivable, and equity rising accordingly from retained earnings and financing activities, mirroring the growth trends from previous periods. Additionally, cash and cash equivalents rose by about 15% to $47.00M supporting liquidity improvements. " "

Geographic Revenue Consolidation

Q1 2025 total revenue of $484.33M

Geographic revenue consolidation indicates strategic market focus where key states like Texas ($61.12M), Georgia ($35.46M), and Florida ($33.49M) continue to contribute significantly. This pattern is consistent with previous periods that emphasized high-growth regions, demonstrating sustained diversification and concentration risk in these markets. "

AFFO per Share

FY 2025

$1.85 to $1.89 " "

$1.85 to $1.89 " " "

no change

Investment Guidance

FY 2025

$900 million to $1.1 billion "

$900 million to $1.1 billion " "

no change

Cap Rate Expectations

FY 2025

Expected cap rates slightly lower than 2024, reflecting modest cap rate compression "

Expected modest cap rate compression in FY 2025 with rates slightly lower than the prior year "

no change

Recurring Cash G&A Guidance

FY 2025

no prior guidance

$28 million to $31 million (with Q1 2025 recurring cash G&A at $7.6 million) "

no prior guidance

Equity Issuance

FY 2025

no prior guidance

Achieving FY 2025 guidance does not require any incremental equity issuance " "

no prior guidance

Same-Store Rent Growth

FY 2025

no prior guidance

1.5% "

no prior guidance

Investment Pipeline and Acquisition Activity

Prior quarters consistently highlighted a robust pipeline – with quarterly investments around $300 million, steady activity in sale‑leaseback transactions, and a clear long‑term growth trajectory. Cap rates were expected in the mid‑to‑high 7% range, and acquisitions were broadly consistent across targeted industries. " " " "

In Q1 2025 the company maintained a strong pipeline with $443 million invested YTD, executed 21 transactions with a strong average GAAP yield of 9.4%, and noted less competition particularly in smaller, granular transactions. The guidance remains supportive of long‑term growth despite anticipated moderate cap rate compression. " "

Consistent focus with slightly improved yields and clearer market dynamics, as reduced competition in niche segments supports robust investment activity.

Tenant Quality, Credit, and Diversification Dynamics

Previous periods emphasized healthy tenant credit with unit‑level coverage between 3.5x and 3.7x, a diversified tenant base (often with the top 10 tenants making up around 17% of ABR), and evolving sentiment marked by adjustments in the watchlist and some minor credit events. " " " "

In Q1 2025, the company reported very strong tenant quality—with 99.7% occupancy, 3.5x unit‑level coverage, improved watchlist metrics, and an 86% reliance on repeat tenant relationships. This focus underscores ongoing stability and a growing confidence in credit quality. " "

Improved sentiment: sustained diversification and credit strength with more positive indicators and fewer credit concerns compared to earlier periods.

Cap Rate Compression and Competitive Market Risks

Across Q2–Q4 2024, there was anticipation of modest cap rate compression as markets normalized. Q3 and Q4 discussions highlighted increased competition—especially in larger transactions—with expectations that cap rates might compress further due to a more competitive bidding environment. " " " "

In Q1 2025, while modest cap rate compression is still expected as markets normalize further, the company observed that its current pipeline shows stable cap rates. Notably, the reduced competition in smaller transactions appears to mitigate the compression pressures for now. " " "

Slight alleviation: although modest compression is on the radar, stable pipeline pricing and less competitive pressure in mid‑market deals mark a more favorable outlook.

Financial Flexibility, Leverage, and Liquidity Concerns

Earlier periods (Q2–Q4 2024) consistently reported low leverage ratios between 3.5x and 3.8x, robust liquidity (ranging from $1.1B to $1.4B), and proactive balance sheet management with strong free cash flow generation and disciplined debt issuance strategies. " " " "

In Q1 2025, the company exhibited even stronger financial metrics with a pro forma leverage of 3.4x and liquidity reaching $1.5B, supported by significant forward equity and a robust senior credit facility. This reinforces its capacity to fund growth even amid a "choppy capital market environment". " " "

Enhanced strength: an improved liquidity position and lower leverage further fortify the already strong balance sheet, positioning the company well for future growth.

Economic Slowdown and Sector-Specific Vulnerabilities

Previous discussions (notably in Q2 and Q3 2024) noted caution regarding certain sectors—such as casual dining, movie theaters, and carwash exposure—while overall tenant performance and service-oriented industries provided resilience. The portfolio was managed to limit exposure to sectors with greater vulnerability amid macro uncertainty. " " "

In Q1 2025, the company reemphasized its resilience by highlighting a focus on necessity‑driven service and experience sectors, strong lease structures (3.5x rent coverage) and managed exposures (e.g. reduced exposure in weaker sectors like casual dining). Financing challenges exist but are offset by robust liquidity. " " "

Resilient positioning: a more confident stance supported by strategic sector adjustments and strong tenant fundamentals offsets potential economic slowdown risks.

Operational Expense Pressures and Asset Disposition Challenges

In Q2–Q4 2024, there was active discussion of operational expenses (with rising G&A costs followed by improved efficiency) and a pronounced focus on asset dispositions—especially within the carwash segment—to manage portfolio risk. Dispositions were executed at set yields and closely monitored as part of proactive risk management. " " "

In Q1 2025, asset disposition activity normalized after a busy previous period, with ongoing efforts in portfolio management. Operational expense pressures are less emphasized, underpinned by strong rent coverage that discourages rent relief, while disposition challenges are now viewed as part of standard portfolio rebalancing. " "

Reduced emphasis: stabilization in expense pressures and normalized disposition activity signal a more mature portfolio management approach and reduced market stress.

Emerging Yield Metrics (e.g., GAAP Yield)

GAAP yield was noted in Q3 2024 (9.1%) and Q4 2024 (9.2%), serving as a key metric to reflect favorable investment returns, though Q2 2024 did not address yield metrics explicitly. " "

Q1 2025 reported a record GAAP yield of 9.4% on investments, underscoring enhanced deal economics and improved underlying performance indicators, streamlining positive evaluation of yield metrics as a core performance measure. " "

Enhanced performance: an upward shift in GAAP yields reflects improved investment performance and overall stronger deal economics.